Spansion Inc. (CODE)

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Spansion to seek debt-for-equity swap to ease financial pressure, says executive

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Josephine Lien, Taipei; Jessie Shen, DIGITIMES [Monday 17 August 2009]

Spansion's financial restructuring following its exit from Chapter 11 will involve a debt-for-equity swap, according to John Nation, director of corporate marketing for the NOR flash chipmaker, during his recent visit to Taiwan. Spansion intends to turn its focus to the embedded solutions market and intellectual property licensing, after succeeding in emerging from bankruptcy in the fourth quarter of 2009.

Spansion has been in talks with its creditors, and has worked out plans to ease its financial burden, said Nation. The company has reached certain agreements on debt-for-equity exchanges.

Spansion will move to focus on improving profitability and financial health, rather than revenue growth and market share expansion, Nation noted. The company is looking to maintain its annual revenues of US$1 billion, and ensure positive cash flow.

Spansion recently announced its cash position rose to US$220 million at the end of the quarter ended June 28, 2009, compared to US$95 million in the prior quarter.

In addition, Nation was quoted by the Chinese-language Economic Daily News (EDN) as saying that Spansion's memorandum of understanding (MOU) inked in October 2008 with chip packaging and testing house Advanced Semiconductor Engineering (ASE) is now invalid due to its insolvency proceedings. Under the MOU, Spansion and ASE agreed to establish a joint venture to co-own Spansion's packaging and testing facility in Suzhou (China).

ASE spokesperson Freddie Liu has confirmed the news, without elaborating further.

http://www.digitimes.com/news/a20090814PD222.html